Chapter 5 The Marketing Environment o Uncontrollable elements outside of any organization that may affect its Marketing Environment Definition performance Environment scanning The immediate corporate environment Company does have some control o Systematic analysis of those elements Macro or external environment no control A Marketing Environment Analysis Framework Consumers may be influenced directly by the immediate actions of the focal company the company s competitors or corporate partners that work with the firm to make a supply products and service to consumers Consumer is the center of all marketing efforts value based marketing aims to provide greater value to consumers than competitors offer The Immediate Environment Company Capabilities Competitors First factors that affects consumer is the firm itself Successful marketing firms focus on satisfying customer needs that match their core competencies Critical that marketers understand their firm s competitors including strengths weaknesses and likely reactions to the marketing activities that their own firm undertakes Corporate Partners Few firms operate in isolation o Automobile manufacturers collaborate with suppliers for sheet metal tire manufacturers component part makers unions transport companies and dealerships to produce and market their automobiles successfully Parties that work with the focal firms are its corporate partners Macro environment factors Demographic population statistics Cultural social values and beliefs Economic income and business Technological innovation Political and Legal laws Competitive what other firms are doing Cultural social factors Values beliefs practices customs Gets passed down from generation to generation and learned over time Challenge for marketers is to have products and services identifiable by the relevant to particular group of people Country Culture vs Regional Culture Country Culture o The visible nuances of a country s culture such as artifacts behaviors dress symbols physical settings ceremonies language differences colors and tastes and food preference o Generally thicker to identify and navigate o Establish a universal appeal within the specific identities of country culture Regional Culture o Affects many people s life o Like the US Social Trends Thrift Health and Wellness Concerns Greener Consumers Privacy Concerns Time Poor Society Thrift American society has become a consumer society yet the economic impacts of a recession and housing crash have prompted many people to embrace the idea of spending less as a virtuous pursuit As consumers have become more savvy and conscientious about bargain shopping and searching for deals innovative entrepreneurs like Groupon and LivingSocial developed business plans to satisfy the desire for a deal Health and Wellness Concerns widespread Health concerns especially those pertaining to children are prevalent critical and Past 20 years child obesity tripled in the US leading to skyrocketing rates of high blood pressure high cholesterol early signs of heart disease and type 2 diabetes among children 1 3 US adults are obese New advertising guidelines require marketers to produce food in reasonably proportioned sizes Advertised food items must provide basic nutrients having less than 30 of their total calories from fat and no added sweeteners Cannot be advertised using children s programming s and companies cannot link unhealthy foods with cartoons and celebrity figures Greener Consumers Green marketing o Involves a strategic effort by firms to supply customers with environmentally o Demand for green oriented products been a boon to the firms that supply o Marketers encourage consumers to replace older versions with water and friendly merchandise them energy saving models o New markets emerge for recycled building products packaging paper goods and efficient appliances lighting heating and cooling systems in the home or office Privacy Concerns The Internet has created an explosion of accessibility to consumer information improvements in computer storage facilities and manipulation of information have led to more and better security and credit check services The Federal Trade Commission FTC ThriftHealth and Wellness ConcernsGreener ConsumersPrivacy ConcernsTime Poor Society o Responds to consumer outcries regarding unwanted telephone solicitations has registered the phone numbers of more than 200 million phone numbers in the Do Not Call Registry o Designed to protect consumers against intrusions that Congress determined to be particularly invasive o May have eliminated many honest telemarketers leaving the wires open for the crooked groups who often use nontraceable recordings to reach potential customers at home A Time Poor Society Median number of hours people say they work has jumped from 41 49 a week The trend is to cope with a lack of leisure time by multi tasking watching television Leisure time has dropped for 26 19 hours a week or listening to music while talking on the phone or doing homework Many retail stores have become full fledged multichannel retailers that offer stores catalogs and Internet shopping options Automated processes like self checkout lanes and electronic kiosks speed the shopping process and provide customers with product and ordering information Demographics Who people are o Age gender ethnicity o Individual income education Demographic Factors Current U S demographic statistics o 319 million people o 115 million households o 49 2 men 50 8 women o Median age 37 Generational cohorts Gen Z 2014 2011 Attitudes Access to information Cynical towards ads rarely click thru Socially connected Digital native Gen X 1976 1965 Focus on children Helicopter parents Biggest spenders at mass merchandisers Value education Convenience is important Ethnicity Gen Y and Millennial 2000 1977 Largest cohort 75 million Wide range of life cycles Inquisitive diverse time managers multi taskers identify with brands Baby Boomers 1964 1946 Control 80 of personal wealth More active than previous never age Postponing retirement Involved in lives of adults children grandchildren Currently minorities represent 37 of U S population 50 4 of all children belong to a minority group Assimilation but strong interest in preserving native heritage What does this mean Education Incomes Education is related to income which determines spending power Employment that requires a college and secondary degree accounts for nearly half of all projected job